10-KT/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended:  

or

[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from December 31, 2011 to September 30, 2012

Commission file number 000-49652

FONU2 INC.

(Exact Name of registrant as specified  in its charter)

Nevada	65-0773383
(State or other Jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

331 East Commercial Blvd.

Ft. Lauderdale, Florida 33334

 (Address of Principal Executive Offices)

(954) 938-4133

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

Indicate by check mark if  the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [  ]   No [X]

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

(1) Yes [X] No [  ]     (2) Yes [X] No [  ]

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No [ ]

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Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:

Large accelerated filer       [   ]	Accelerated filer                      [   ]
Non-accelerated filer         [   ]	Smaller reporting company    [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes [  ] No [X]

State the aggregate market value of the voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant's most recently completed second fiscal quarter.

December 18, 2012 - $2,075,147.  There are approximately 34,585,775 shares of common voting stock of the Registrant beneficially owned by non-affiliates.  There is a limited public market for the common stock of the Registrant, so this computation is based upon the closing sale price of $0.06 per share of the Registrant's common stock on the OTC Bulletin Board on December 18, 2012.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Not applicable.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date:

December 18, 2012:  Common – 58,658,452

Documents incorporated by reference: See Item 15.

EXPLANATORY NOTE:

This Amended Transition Report is being filed solely for the purpose of filing corrected XBRL files.  This filing contains no other changes in the previously filed Transition Report on Form 10KT filed with the Securities and Exchange Commission on January 16, 2013.

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PART IV

ITEM 15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1)(2)    Financial Statements.  See the audited financial statements and financial statement schedules for the year ended September 30, 2012, contained in Item 8 above which are incorporated herein by this reference.*

(a)(3)         Exhibits.  The following exhibits are filed as part of this Amended Transition Report:

No.            Description

101.INS	XBRL Instance Document*
101.PRE.	XBRL Taxonomy Extension Presentation Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.SCH	XBRL Taxonomy Extension Schema*

*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FONU2 INC.

Date:	January 18, 2013	By:	/s/Jeffrey Pollitt
			Jeffrey Pollitt
			Chief Executive Officer, President and Director

Pursuant to the requirements of the Securities Exchange Act of 1934 this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

FONU2 INC.

Date:	January 18, 2013	By:	/s/Jeffrey Pollitt
			Jeffrey Pollitt
			Chief Executive Officer, President and Director
Date:	January 18, 2013	By:	/s/Robert B. Lees
			Robert B. Lees
			Chief Financial Officer, Secretary and Director
Date:	January 18, 2013	By:	/s/Nicole Leigh
			Nicole Leigh
			Director

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Summary of Significant Accounting Policies: Reverse-merger Transaction (Details) (USD $)	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Common and preferred stock issued for cash	$ 53,411,262	$ 95,400	$ 330,970

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Equity Transactions

9 Months Ended

Sep. 30, 2012

Equity Transactions:

Equity Transactions

EQUITY TRANSACTIONS

During the year ended December 31, 2011, the Company issued 532,144 shares of common stock for cash, resulting in total cash proceeds of $190,991.

During the year ended December 31, 2011, the Company issued 168,239 shares of preferred stock series A for cash, resulting in total cash proceeds of $139,980.  In addition, the Company issued 700,000 shares of preferred stock series B for services rendered.  The Company realized a total expense in the amount of $580,913 relating to these issuances.  These shares were valued at the respective share prices of the most recent sales of common stock for cash.  Holders of preferred series A receive non-cumulative dividends with common shareholders and the equivalent of one vote for each share held.

In September of 2009, the Company entered into an employment agreement with Jeffrey Pollitt.  The agreement called for a base salary of $250,000 per year.  In March of 2010, the Company entered into an employment agreement with William LaVenia.  The agreement called for a base salary of $250,000 per year.  All amounts under these agreements have been forgiven by these officers, resulting in contributed salary of $62,500, $437,500 and $500,000 during the years ended December 31, 2009, 2010 and 2011, respectively.

During the period ended September 30, 2012 the Company converted 868,239 shares of Series A preferred stock and an additional 1,639,368 shares of Series B preferred stock into 2,507,607 shares of common stock.  The preferred shares were converted into common shares on a one preferred share for one common share basis, pursuant to the conversion terms of the preferred stock.

During the period ended September 30, 2012 the Company issued the following:

·         129,125 shares of common stock for cash proceeds of $95,400, at an average of $0.74 per share. 

·         7,020,341 shares of common stock for services rendered.  The shares issued for services were valued at the value of the most recent cash issuances, resulting in an aggregate value of $5,383,224. 

·         29,441,014 shares of common stock to various parties pursuant to certain non-dilution clauses in various service agreements.  These shares were valued at an aggregate of $28,852,194, or $0.98 per share. 

·         2,250,000shares of common stock as a prepayment on certain professional services.  These shares were valued at an aggregate of $427,500. 

·         50,000 shares of common stock as payment of interest on a note payable.  These shares were valued at $13,500.

In August of 2012, the Company settled 500,000 of outstanding Series A preferred stock by transferring land and buildings owned by the Company to the shareholders. These shares were valued at an aggregate of $320,700.

The Company cancelled 100,000 shares issued for services due to non-performance.

On March 6, 2012, the Company executed an Agreement and Plan of Reorganization (the “Agreement”) with FONU2, and Jeffrey M. Pollitt, who is the Company’s Chief Executive Officer and the holder of approximately 37% of the Company’s outstanding shares of common stock.  Under the Agreement, FONU2 acquired all of the material assets of the Company in exchange for 53,411,262 “unregistered” and “restricted” shares of FONU2’s common stock, which represented approximately 85% of FONU2’s issued and outstanding common stock upon issuance, with such shares to be issued pro rata to the Company’s common stockholders.  The transaction closed on March 29, 2012.

Prior to the merger, there were 500,000 shares of Preferred Stock Series A and 9,374,920 shares of common stock outstanding.  The fair value of FONU2’s net assets acquired on March 29, 2012 consisted of the following:

	AMOUNT
Cash	$          8,249
Inventory	18,044
Land and Building	320,700
Property, plant and equipment	12,855
Deposit	2,285
Accounts Payable	(15,645)
Total	$      346,488

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Equity Transactions (Details) (USD $)	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2012	Sep. 30, 2012	Dec. 31, 2011	Mar. 29, 2012
CommonStockSharesIssued			532,144
Common and preferred stock issued for cash	$ 53,411,262	$ 95,400	$ 330,970
PreferredStockSharesIssued			168,239
PreferredUnitsIssued			580,913
ProceedsFromPartnershipContribution		250,000
StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities		50,000
ConvertiblePreferredStockSharesIssued		500,000
WeightedAverageNumberOfSharesCommonStockSubjectToRepurchaseOrCancellation		100,000
Cash		3,038		8,249
Inventory		$ 7,276		$ 18,044

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Note Payable (Details) (USD $)	Sep. 30, 2012	May 21, 2012	May 01, 2012	Dec. 31, 2011
LongTermNotesPayable	$ 21,000	$ 58,000	$ 40,000	$ 0

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Subsequent Events (Details) (USD $)	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Common and preferred stock issued for cash	$ 53,411,262	$ 95,400	$ 330,970

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Note Payable

9 Months Ended

Sep. 30, 2012

Note Payable:

Note Payable

NOTE PAYABLE

Convertible Notes Payable

During 2011, the Company entered into two debt agreements for a total of $75,000.  The proceeds from the notes were to be held in escrow until completion of a merger with a public entity.  The notes carry interest at 10% and are convertible into shares of the potential merged entity at a discount of 30% to the market price of the potential merged entity’s common stock, however the conversion price can be no lower than $0.10 or higher than $0.50.  If the merger did not occur, the Company must repay the note plus 10% interest.  As of December 31, 2011, $25,000 of the funds were released from escrow for working capital purposes but are not considered convertible until closing of the merger.  During the nine months ended September 30, 2012 the remaining $50,000 of the funds were released from escrow.  As of September 30, 2012, the Company had $75,000 in convertible notes outstanding. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instruments should be classified as liabilities as of the merger date of March 29, 2012, due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The value of the derivative liabilities on the merger date were insignificant.  These instruments were no longer considered derivative liabilities as of September 30, 2012 due to the settlement of preferred stock through transfer of property described in Note 4.

Other Notes Payable

On May 21, 2012 the Company borrowed $58,000 from an unrelated third party entity in the form of a note payable.  The note accrues interest at a rate of eight percent per annum and is convertible into shares of the Company’s common stock at a 58 percent of the lowest three trading prices in the ten day period prior to conversion. The note becomes convertible 180 days after the date of the note.

On May 1, 2012 the Company borrowed $40,000 in the form of a note payable.  The note is unsecured, accrues interest at a rate of 10 percent per annum, and is due on demand. The Company issued 50,000 shares of common stock in conjunction with these notes. The fair value of the common stock was determined to be $13,500, which was recorded as a debt discount. The entire debt discount has been amortized into interest expense as of September 30, 2012.

As of September 30, 2012 and December 31, 2011, the Company has made payments on note payables of $21,000 and $0, respectively.

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Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Cash	$ 3,038
Inventory	7,276
Prepaid expenses	220,548
Total Current Assets	230,862
PROPERTY AND EQUIPMENT, net	12,855	1,030
Security deposits	2,285	2,285
TOTAL ASSETS	246,002	3,315
Accounts payable and accrued expenses	81,926	11,800
Accrued interest payable	7,154
Payroll liabilities	136,424
Notes payable	77,000	25,000
Convertible notes payable	75,000
Bank overdraft		893
Total Current Liabilities	377,504	37,693
TOTAL LIABILITIES	377,504	37,693
Preferred stock series A; 20,000,000 shares authorized, at $0.01 par value, -0- and 868,239 shares issued and outstanding, respectively		8,682
Preferred stock series B; 20,000,000 shares authorized,at $0.01 par value, -0- and 1,639,638 shares issued and outstanding, respectively		16,394
Common stock; 2,000,000,000 shares authorized, at $0.001 par value, 66,676,182 and 16,003,175 shares issued and outstanding, respectively	66,676	16,003
Additional paid-in capital	37,144,409	2,372,400
Accumulated deficit	(37,342,587)	(2,447,857)
Total Stockholders' Deficit	(131,502)	(34,378)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)	$ 246,002	$ 3,315

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Summary of Significant Accounting Policies:

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

FONU2, Inc. (“the Company”, “FONU2”) was organized on August 26, 2009, under the laws of the State of Florida, as Cygnus Internet, Inc. 

Reverse-Merger Transaction

On December 2, 2011, the stockholders of Zaldiva, Inc., a Florida corporation (“Zaldiva”) approved Zaldiva’s change of domicile from the state of Florida to the state of Nevada.  The change of domicile was effectuated by merging Zaldiva into its newly-formed wholly-owned subsidiary, FONU2 Inc., a Nevada corporation formerly known as Zaldiva, Inc. (“FONU2”), with every share of Zaldiva’s common and preferred stock automatically being converted into one-half of one corresponding share of FONU2, and with all fractional shares that would otherwise result from such conversion being rounded up to the nearest whole share.  Zaldiva and FONU2 filed Articles of Merger in the States of Florida and Nevada on December 2, 2011.  The change of domicile and de facto reverse-split were effectuated on January 9, 2012. 

On March 6, 2012, the Company executed an Agreement and Plan of Reorganization (the “Agreement”) with Cygnus Internet Inc. (“Cygnus”), and Jeffrey M. Pollitt, who is Cygnus’ Chief Executive Officer and the holder of approximately 37% of Cygnus outstanding shares of common stock.  Under the Agreement, FONU2 acquired all of the material assets of Cygnus in exchange for 53,411,262 “unregistered” and “restricted” of FONU2’s common stock, which represented approximately 85% of FONU2’s issued and outstanding common stock upon issuance, with such shares to be issued pro rata to the Cygnus common stockholders.  The transaction closed on March 29, 2012.

The Agreement was accounted for as a reverse-merger recapitalization transaction, with Cygnus as the accounting acquirer, and FONU2 as the legal acquirer.  The historical financial statements presented herein for the period prior to the merger date are those of Cygnus.  Concurrent with the transaction, Cygnus changed its fiscal year end to September 30.  The Company has elected to file financial statements for the nine months ended September 30, 2012 to satisfy the requirement for filing financial statements for a period of one year as allowed by SEC Rule S-X 3-06.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Basic (Loss) per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2011 and 2010.

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Property and Equipment

Property and equipment is recorded at cost.  Major additions and improvements are capitalized and depreciated over their estimated useful lives.  Depreciation of property and equipment is determined using the straight-line method over their useful lives, which ranges from three to five years.  Gains or losses on the sale or disposal of property and equipment are included in the statements of operations. Maintenance and repairs that do not extend the useful life of the assets are expensed as incurred. 

Inventory

The Company’s inventory consists of various comic books, toys, and other collectible items.  These items are purchased from external suppliers.  The inventory items are recorded and valued at cost. Management performs periodic reviews of its slow-moving inventory for possible impairment.  When slow-moving inventory is identified, its cost is also adjusted so as to represent the lower of cost or market at all times.

Revenue Recognition

The Company's revenues are generated from the sales of various comic books, toys, and other collectible items.  Sales are transacted primarily through the Company’s website, via credit card order; or through eBay, via Paypal or e-check transaction.  The Company follows guidance found in ASC 605, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements.

ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue related to merchandise sales when the following conditions are met:

a)       Persuasive evidence of an arrangement exists,

b)       Delivery has occurred or services have been rendered,

c)       The fee is fixed or determinable,

d)       Collectability is reasonably assured. 

Cost of Sales

When an inventory item is sold, the Company recognizes cost of sales expense for the value of the inventory item sold.  This value includes the purchase price of the inventory item, plus any expenditures on improvements to the inventory items.  Shipping costs are not included in cost of sales calculations.

Accounting Basis

The basis is accounting principles generally accepted in the United States of America.  The Company has adopted a December 31 fiscal year end.

Stock-Based Compensation.

The Company accounts for share-based compensation in accordance with Accounting Standards Codification subtopic 718-10, Stock Compensation (“ASC 718-10”). This requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had nor is not expected to have a material impact on the Company’s financial position or statements.

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Summary of Significant Accounting Policies: Stock-based Compensation. (Policies)

9 Months Ended

Sep. 30, 2012

Stock-based Compensation.:

Stock-based Compensation.

Stock-Based Compensation.

The Company accounts for share-based compensation in accordance with Accounting Standards Codification subtopic 718-10, Stock Compensation (“ASC 718-10”). This requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including employee stock options and employee stock purchases related to an Employee Stock Purchase Plan based on the estimated fair values.

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Note Payable: Convertible Notes Payable (Policies)

9 Months Ended

Sep. 30, 2012

Convertible Notes Payable:

Convertible Notes Payable

Convertible Notes Payable

During 2011, the Company entered into two debt agreements for a total of $75,000.  The proceeds from the notes were to be held in escrow until completion of a merger with a public entity.  The notes carry interest at 10% and are convertible into shares of the potential merged entity at a discount of 30% to the market price of the potential merged entity’s common stock, however the conversion price can be no lower than $0.10 or higher than $0.50.  If the merger did not occur, the Company must repay the note plus 10% interest.  As of December 31, 2011, $25,000 of the funds were released from escrow for working capital purposes but are not considered convertible until closing of the merger.  During the nine months ended September 30, 2012 the remaining $50,000 of the funds were released from escrow.  As of September 30, 2012, the Company had $75,000 in convertible notes outstanding. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instruments should be classified as liabilities as of the merger date of March 29, 2012, due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The value of the derivative liabilities on the merger date were insignificant.  These instruments were no longer considered derivative liabilities as of September 30, 2012 due to the settlement of preferred stock through transfer of property described in Note 4.

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Going Concern

9 Months Ended

Sep. 30, 2012

Going Concern:

Going Concern

GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  However, the Company has accumulated deficit of $37,342,587 as of September 30, 2012, and negative working capital of $146,642.  During the nine months ended September 30, 2012 the Company realized negative cash flows from operations totaling $226,718.  The Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through equity and/or debt instruments. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern. The consolidated financial statements contain no adjustment for the outcome of this uncertainty.

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Statements of Income (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
REVENUES	$ 81,455
COST OF SALES	47,018
GROSS PROFIT	34,437
Depreciation		2,033
Compensation	34,388,907	571,113
General and administrative	519,608	916,939
Total Operating Expenses	34,908,515	1,490,085
LOSS FROM OPERATIONS	(34,874,078)	(1,490,085)
Interest expense, net	(20,652)
Total Other Expenses	(20,652)
INCOME (LOSS) BEFORE INCOME TAXES	(34,894,730)	(1,490,085)
NET INCOME (LOSS)	$ (34,894,730)	$ (1,490,085)
BASIC AND DILUTED INCOME (LOSS) PER SHARE	$ (0.70)	$ (0.09)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	49,941,022	15,735,170

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Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)

9 Months Ended

Sep. 30, 2012

Cash and Cash Equivalents:

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

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Document and Entity Information (USD $)	9 Months Ended
	Sep. 30, 2012
Document and Entity Information:
Entity Registrant Name	FONU2 INC.
Document Type	10-K
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Entity Central Index Key	0001168325
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding	58,658,452
Entity Public Float	$ 58,658,452
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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Summary of Significant Accounting Policies: Property and Equipment (Policies)

9 Months Ended

Sep. 30, 2012

Property and Equipment:

Property and Equipment

Property and Equipment

Property and equipment is recorded at cost.  Major additions and improvements are capitalized and depreciated over their estimated useful lives.  Depreciation of property and equipment is determined using the straight-line method over their useful lives, which ranges from three to five years.  Gains or losses on the sale or disposal of property and equipment are included in the statements of operations. Maintenance and repairs that do not extend the useful life of the assets are expensed as incurred. 

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Statements of Stockholders' Equity (USD $)	Preferred Series A	Preferred Series B	Common stock	Additional Paid In Capital	Accumulated Deficit	Total
Conversion of Stock, value at Dec. 31, 2010
Preferred stock issued for cash, value	$ 1,682					$ 1,682
Preferred stock issued for cash, shares	168,239			138,298		306,537
Common stock issued for cash, value			532	190,459		190,991
Common stock issued for cash, shares			532,144			532,144
Distributions to Shareholders				(1,830)		(1,830)
Preferred stock issued for services, value	7,000			573,913		580,913
Preferred stock issued for services, shares	700,000					700,000
Contribution of capital by shareholders				1,000		1,000
Contribution of services				500,000		500,000
Contribution of capital for officers				41,600		41,600
NET LOSS					(1,490,085)	(1,490,085)
Stockholders' Equity, ending balance at Dec. 31, 2011	8,682	16,394	16,003	2,372,400	(2,447,857)	(34,378)
Balance common shares, ending balance at Dec. 31, 2011			16,003,175		16,003,175
Balance preferred shares a, ending balance at Dec. 31, 2011	868,239	1,639,368				2,507,607
Conversion of Stock, value at Dec. 31, 2011
Common stock cancelled, value			(100)			(100)
Common stock cancelled, shares			(100,000)			(100,000)
Common stock issued for cash, value			129	95,271		95,400
Common stock issued for cash, shares			129,125			129,125
Common stock issued for services pursuant to non-dilution clauses, value			29,441	28,822,753		28,852,194
Common stock issued for services pursuant to non-dilution clauses, shares			29,441,014			29,441,014
Common stock issued for prepaid services, value			2,250	425,250		427,500
Common stock issued for prepaid services, shares			2,250,000			2,250,000
Common stock issued for interest on note, value			50	13,450		13,500
Common stock issued for interest on note, shares			50,000			50,000
Common stock issued to acquire Zaldiva.com, value			9,375	16,513		25,888
Common stock issued to acquire Zaldiva.com, shares			9,374,920			9,374,920
Common stock issued for services, value			7,020			7,020
Common stock issued for services, shares			7,020,341	5,376,204		12,396,545
NET LOSS					(34,894,730)	(34,894,730)
Balance common shares, ending balance at Sep. 30, 2012			66,676,182			66,676,182
Stockholders' Equity, ending balance at Sep. 30, 2012			66,676	37,144,409	(37,342,587)	(131,502)
Conversion of Stock, value at Sep. 30, 2012	$ (8,682)	$ (16,394)	$ 2,508			$ (22,568)
Conversion of Stock, shares at Sep. 30, 2012	(868,239)	(1,639,368)	2,507,607	22,568		22,568

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events:

Subsequent Events

SUBSEQUENT EVENTS

On October 22, 2012, the Company agreed to purchase a total of 8,102,736 shares of its common stock from a stockholder for the total aggregate consideration of one dollar.

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes:

Income Taxes

INCOME TAXES

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.

ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to net the loss before provision for income taxes for the following reasons:

	September 30, 2012	December 31, 2011
Income tax expense at statutory rate	$      (12,056,960)	$        (521,530)
Stock-based compensation and contributed salary	12,129,555	378,320
Change in valuation allowance	(72,595)	143,210
Income tax expense per books	$                    -	$                     -

Net deferred tax assets consist of the following components as of:

	September 30, 2011	December 31, 2011
Deferred tax asset	$        (140,475)	$         (213,070)
Valuation allowance	140,475	213,070
Net deferred tax asset	$                   -	$                      -

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $401,358 for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.

We account for uncertain tax positions in accordance with the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) on income taxes which addresses how we should recognize, measure and present in our financial statements uncertain tax positions that have been taken or are expected to be taken in a tax return. Pursuant to this guidance, we can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent that the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50% likely of being realized upon settlement. No liability for unrecognized tax benefits was recorded as of September 30, 2012 and December 31, 2011.

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Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2012

Recent Accounting Pronouncements:

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had nor is not expected to have a material impact on the Company’s financial position or statements.

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Summary of Significant Accounting Policies: Inventory (Policies)

9 Months Ended

Sep. 30, 2012

Inventory:

Inventory

Inventory

The Company’s inventory consists of various comic books, toys, and other collectible items.  These items are purchased from external suppliers.  The inventory items are recorded and valued at cost. Management performs periodic reviews of its slow-moving inventory for possible impairment.  When slow-moving inventory is identified, its cost is also adjusted so as to represent the lower of cost or market at all times.

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Summary of Significant Accounting Policies: Use of Estimates (Policies)

9 Months Ended

Sep. 30, 2012

Use of Estimates:

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

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Summary of Significant Accounting Policies: Nature of Business (Policies)

9 Months Ended

Sep. 30, 2012

Nature of Business:

Nature of Business

Nature of Business

FONU2, Inc. (“the Company”, “FONU2”) was organized on August 26, 2009, under the laws of the State of Florida, as Cygnus Internet, Inc. 

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Summary of Significant Accounting Policies: Reverse-merger Transaction (Policies)

9 Months Ended

Sep. 30, 2012

Reverse-merger Transaction:

Reverse-merger Transaction

Reverse-Merger Transaction

On December 2, 2011, the stockholders of Zaldiva, Inc., a Florida corporation (“Zaldiva”) approved Zaldiva’s change of domicile from the state of Florida to the state of Nevada.  The change of domicile was effectuated by merging Zaldiva into its newly-formed wholly-owned subsidiary, FONU2 Inc., a Nevada corporation formerly known as Zaldiva, Inc. (“FONU2”), with every share of Zaldiva’s common and preferred stock automatically being converted into one-half of one corresponding share of FONU2, and with all fractional shares that would otherwise result from such conversion being rounded up to the nearest whole share.  Zaldiva and FONU2 filed Articles of Merger in the States of Florida and Nevada on December 2, 2011.  The change of domicile and de facto reverse-split were effectuated on January 9, 2012. 

On March 6, 2012, the Company executed an Agreement and Plan of Reorganization (the “Agreement”) with Cygnus Internet Inc. (“Cygnus”), and Jeffrey M. Pollitt, who is Cygnus’ Chief Executive Officer and the holder of approximately 37% of Cygnus outstanding shares of common stock.  Under the Agreement, FONU2 acquired all of the material assets of Cygnus in exchange for 53,411,262 “unregistered” and “restricted” of FONU2’s common stock, which represented approximately 85% of FONU2’s issued and outstanding common stock upon issuance, with such shares to be issued pro rata to the Cygnus common stockholders.  The transaction closed on March 29, 2012.

The Agreement was accounted for as a reverse-merger recapitalization transaction, with Cygnus as the accounting acquirer, and FONU2 as the legal acquirer.  The historical financial statements presented herein for the period prior to the merger date are those of Cygnus.  Concurrent with the transaction, Cygnus changed its fiscal year end to September 30.  The Company has elected to file financial statements for the nine months ended September 30, 2012 to satisfy the requirement for filing financial statements for a period of one year as allowed by SEC Rule S-X 3-06.

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Summary of Significant Accounting Policies: Basic (loss) Per Common Share (Policies)

9 Months Ended

Sep. 30, 2012

Basic (loss) Per Common Share:

Basic (loss) Per Common Share

Basic (Loss) per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2011 and 2010.

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Summary of Significant Accounting Policies: Cost of Sales (Policies)

9 Months Ended

Sep. 30, 2012

Cost of Sales:

Cost of Sales

Cost of Sales

When an inventory item is sold, the Company recognizes cost of sales expense for the value of the inventory item sold.  This value includes the purchase price of the inventory item, plus any expenditures on improvements to the inventory items.  Shipping costs are not included in cost of sales calculations.

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Going Concern (Details) (USD $)	Sep. 30, 2012
Capital	$ 146,642

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Statements of Cash Flows (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Net loss	$ (34,894,730)	$ (1,490,085)
Change in Depreciation		2,033
Amortization of debt discount	13,500
Contributed salary		500,000
Stock-based compensation	34,235,418	580,913
Change in Inventory	10,768
Change in Prepaid expenses	206,952
Change in Other assets	2,285	(2,285)
Change in Accounts payable & accrued liabilities	199,089	11,791
Net Cash Used in Operating Activities	(226,718)	(397,633)
Cash received	8,249
Capital contributions		42,600
Change in distributions to shareholders		(1,830)
Proceeds from convertible debt	50,000
Proceeds from notes payable	98,000	25,000
Payments on notes payable	(21,000)
Change in bank overdraft	(893)	893
Common and preferred stock issued for cash	95,400	330,970
Net Cash Provided by Investing Activities	221,507	397,633
NET INCREASE (DECREASE) IN CASH	3,038
CASH AT END OF YEAR	3,038
Shares issued to acquire Zaldiva.com	338,239
Settlement of preferred stock for property	320,700
Conversion of preferred stock to common stock	25,076
Debt discount due to shares issued with debt	13,500
Stock issued for prepaid expenses	427,500
Cancellation of common shares	$ 100

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Common Stock Warrants and Options

9 Months Ended

Sep. 30, 2012

Common Stock Warrants and Options:

Common Stock Warrants and Options

COMMON STOCK WARRANTS AND OPTIONS

Prior to the merger transaction described in Note 1, Zaldiva had 500,000 warrants and 905,000 options outstanding.  These options and warrants were exchanged in the transaction at a 1:1 ratio and are now exercisable into shares of FONU2, Inc.  The following tables summarize these options and warrants from the date of merger through September 30, 2012.

During the nine months ended September 30, 2012 1,161,000 warrants expired unexercised.

The following tables summarize the stock warrant and option activity as of and for the period ended September 30, 2012:

	WARRANTS
		Number of Warrants	Weighted Average Exercise Price		Value if Exercised	Weighted Average Remaining Contractual Term
03/29/2012		1,661,000	$	0.58	968,345	1.45
Expired		(1,161,000)		0.30	(625,000)	-
09/30/2012		500,000	$	0.01	5,000	0.45
Exercisable at 09/30/2012		500,000	$	0.01	5,000	0.45

	OPTIONS
	Date	Number of Options	Weighted Average Exercise Price		Value if Exercised	Weighted Average Remaining Contractual Term
Outstanding at March 29, 2012		905,000	$	0.50	452,500	5.56
Granted		-		-	-	-
Exercised		-		-	-	-
Cancelled		-		-	-	-
Outstanding at September 30, 2012		905,000	$	0.50	452,500	4.56
Exercisable at September 30, 2012		905,000	$	0.50	452,500	4.56

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Note Payable: Convertible Notes Payable (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
ConvertibleDebt	$ 50,000	$ 75,000

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Summary of Significant Accounting Policies: Revenue Recognition (Policies)

9 Months Ended

Sep. 30, 2012

Revenue Recognition:

Revenue Recognition

Revenue Recognition

The Company's revenues are generated from the sales of various comic books, toys, and other collectible items.  Sales are transacted primarily through the Company’s website, via credit card order; or through eBay, via Paypal or e-check transaction.  The Company follows guidance found in ASC 605, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements.

ASC 605 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosure related to revenue recognition policies. In general, the Company recognizes revenue related to merchandise sales when the following conditions are met:

a)       Persuasive evidence of an arrangement exists,

b)       Delivery has occurred or services have been rendered,

c)       The fee is fixed or determinable,

d)       Collectability is reasonably assured.